Retail shares escaped the worst of another late-day swoon on Wall Street on Thursday but couldn’t get away unscathed after investors pulled back following Standard & Poor’s reduction of General Electric Co.’s outlook to “negative” from “stable.”
After spending most of the day in positive territory, the Standard & Poor’s Retail Index dropped 1.4 percent to 286.61. It fared better than the Dow Jones Industrial Average, which dropped 2.5 percent to 8,604.99, and the S&P 500, down 2.1 percent to 885.28. Both retreated quickly in the late afternoon after S&P lowered its outlooks on both General Electric Co. and its General Electric Capital Corp. (GECC) unit, based principally on concerns about GECC’s effect on GE’s gold-standard “AAA” long-term credit rating.
“GECC will account for about a third of GE’s earnings in 2009 — or less if worse-than-expected credit losses further reduce GECC’s earnings,” wrote S&P analyst Robert Schulz. “Even with its current stand-alone credit profile of ‘A-plus,’ GECC remains one of the world’s most profitable and highly rated financial institutions.”
However, he said, “fundamentals-based earnings and cash flow could decline sufficiently during the next two years to warrant a downgrade.”
GE’s commitment to the financial unit has been demonstrated in recent months by the infusion of $5 billion in equity into GECC and the reduction of GECC’s dividend payout to GE to 10 percent of net earnings from 40 percent.
The status of GECC is critical to the apparel and retail industries because it provides credit to consumers as well as retailers and wholesalers. It provided financing to Goody’s Family Clothing Inc. when the retailer entered bankruptcy in June and again when the firm exited Chapter 11 in October. Goody’s is reportedly running low on cash yet again. GE also extended financing to Steve & Barry’s prior to that company’s bankruptcy and subsequent liquidation and to the troubled Finlay Enterprises to help with the 2007 acquisition of Bailey Banks & Biddle. Lord & Taylor and Gottschalks, among many others, also have credit arrangements with the firm.
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)
Discovery is collaborating with British pop artist @philipcolbert on a new line of clothing and accessories called Discovery Shark. The collection, which will launch next summer for Shark Week’s 30th anniversary, features a whimsical line of women’s and men’s bomber jackets, sweatshirts, bags and more. #wwdfashion
“I’m always a big champion of a female rapper, and I’m glad to see a new voice that feels unique and authentic that’s coming up, and I think we’re going to see more great things from her,” said @itsjeremyscott about @iamcardib, who performed at @moschino’s Art Basel Miami Beach party last night. #wwdeye (📷: @lexieblacklock)
@janellemonae’s “What’s Your Frequency?” room in @refinery29's #29Rooms made its debut this week at the opening of the Los Angeles art exhibit. “It’s about the ongoing conversation around mass surveillance, the weaponization of technology and cultural uniformity. My space was created so that we can come together and talk about the complexities of our humanity,” said Monáe. #wwdeye (📷: @bucknerphoto)
@pantone announced their Color of the Year 2018: Ultra Violet. Nearly 20 months after the musician Prince’s death, fashion is having a purple moment. Varying shades of purple appeared on spring or fall runways, from @christopherkane to @calvinklein. @gucci’s Alessandro Michele bathed his fall runway in ultra violet-colored light at one point. Pantone 18-3838 is meant to “push the boundaries of what inspires us to look upward and outward to the future.” #wwdnews #wwdfashion (📷: @kukukuba)